General Motors

[XpunkRocker]

If it is written in the law, then they will have to pay it back. What are you talking about?

These kinds of things hardly get paid back. It will be a good 6-10 years until they start making any payments on this debt. and if the company folds, there is no way to pay the government back. paying off 10 billion isn't something that can be done in my lifetime, and i am fairly young. these companies are losing money. if they can't make a profit, they can't pay off their debt. fannie mae and all of them will do the same thing. they will ask the government to delay, and when they start paying, it will be just the minimum payments. which is about a good 10 years away

 

[BlackLantern]

Look, let's not talk in suppositions here. The last time we did that with Chrysler back in 1979, they paid their loans back with interest within 4 years. That is a fact, and I see no reason why the Big three would not be able to pay back this debt seeing that they have presented a very well thought out business strategy before congress (GM's alone was the size of a phone book). Part of the deal would be that the CEO's would only take a dollar in salary (that would mean that they wouldn't get the money for themselves) so your premise that the money would go to the executives is kind of misconstrued.

CEOs aren't the only ones working for companies that are greedy ****ers....You think there aren't ways around something like a $1 salary? I used to think you were stubborn, now I see you're a bit naive....

This is what I would do in this situation....I'd take a chunk of that money and put it into some BS research division at the auto company I work for, so it looks like, on paper, that the money is being used properly....then I wait a year or two, dissolve the "division", claiming no signifcant process has been made and pocket the money (as it wasn't spent anyway)....or I'd take a chunk, made sure I'm good friends with one of the other executives, pad his compensation package with my money, then when the executive leaves the company, have him cut me a check or transfer the money that I gave to him....I could go on, but I won't

 

[XpunkRocker]

^that is all really reasonable, and i agree. i have others i would add, but it get detailed.

 

[dnno1]

You're funny.....



So, who do you think I voted for in the last, lets see........................5 elections?

I am not a sooth sayer, but I have this strange feeling that you didn't vote in all of the last 5 presidential elections.

 

[Paradoxium]

CEOs aren't the only ones working for companies that are greedy ****ers....You think there aren't ways around something like a $1 salary? I used to think you were stubborn, now I see you're a bit naive....

This is what I would do in this situation....I'd take a chunk of that money and put it into some BS research division at the auto company I work for, so it looks like, on paper, that the money is being used properly....then I wait a year or two, dissolve the "division", claiming no signifcant process has been made and pocket the money (as it wasn't spent anyway)....or I'd take a chunk, made sure I'm good friends with one of the other executives, pad his compensation package with my money, then when the executive leaves the company, have him cut me a check or transfer the money that I gave to him....I could go on, but I won't

IIRC, the $1 salary is going to last only a year.

-----------------------------------------------------------

I've always wondered how the auto business would have been if Chrysler would have been if it went out of business in the 80s. Maybe GM and Ford would have tightened their belts and it would be a lot healthier now.

BTW, the private equity firm that owns Chrysler doesn't even want to put money into the company. That tells me everything I need to know with their books. I am still pulling for Ford not to take any of this, fool's hope I know.

 

[XpunkRocker]

I am not a sooth sayer, but I have this strange feeling that you didn't vote in all of the last 5 presidential elections.

didn't say presidental elections. kel said "elections."

 

[Handsome Rob]

You realize that they pay this (Social Security and Medicare) for every employee (even the salaried non-union ones)? I would argue that they are contributing more for the salaried employees than the hourly. Furthermore, they have to do this because they are required by a law under the Federal Insurance Contributions Act - or FICA). You can not blame the unions for those payments. Once again why are we including this into the equation?

If you understand that it is the law then you shouldn't blame the unions for the extra expense made by the employer. You should not turn and blame the law since it was enacted to protect working people who eventually retire to a lower income level. Employee expenses are only 10% of the cost of operating an automobile industry and the expense to union employees are only a fraction of that. Once again we shouldn't be blaming the unions for the fact that there is a lack of credit, fuel prices were extremely high, and consumers are not buying as many cars as they used to (this last fact can be seen throughout the industry).

Responses to the bolded statements:

1. The tax rate is the same whether union or not, whether hourly or salaried. There's no difference in the rates for employees based on union status or how how they are paid.

2. We're including this because you originally implied that the salary cost is the cost to the company. I merely used the employer's share of SST/MRT and health insurance to point out that there is more to an employee in terms of employer cost than paying his salary.

3 and 4. I don't blame unions for that. I do blame the unions for contributing to the labor cost (85% in excess of wage expense). That's a high percentage of extra-wage labor expense, and it affects the bottom line of the Big Three, whether you want to admit it or not. Now, I'm saying this next part in bold, because I want you to remember it the next time you accuse me of placing the blame squarely on the unions: I do not solely blame the unions for the troubles the Big Three are in. They are a contributing factor to the current troubles, and like any company that is having trouble with debt service, the Big Three need to examine how to rein in that cost.

 

[Visionary]

Just let them crash and burn. They deserve it and so does the American people.

 

[XpunkRocker]

.......yeah,

 

[Visionary]

So you agree. Good boy. Now sit.

 

[dnno1]

Responses to the bolded statements:

1. The tax rate is the same whether union or not, whether hourly or salaried. There's no difference in the rates for employees based on union status or how how they are paid.

Sure, the rates are the same, but if I made $100K/year, the company would have to contribute more that twice as much for me as the would for the average unionized auto worker. That's the misleading thing about your statement (and your argument) and you have to be careful about the context it is in.

2. We're including this because you originally implied that the salary cost is the cost to the company. I merely used the employer's share of SST/MRT and health insurance to point out that there is more to an employee in terms of employer cost than paying his salary.

I actually addressed the question to you because you were the one that included it. If you want to answer for everyone else that is fine although I would certainly hope you got the concurrence of your compadres. That is nice that you want to point out that the FICA taxes and health care insurance premiums are a part of these companies' overall expenses, but the real point here is that some of you are trying to blame the unions for asking for too much money when, in truth the average autoworker is above the poverty line by about $20K/year. Furthermore the other (foriegn) car companies competing in the industry are paying about the same or better as far as taxes and benefits go. In any case (and once again I state that) employee salaries make up 10% of the total expenses that the Big 3 are shelling out to make and sell cars and the unionized autoworkers wages are only a fraction of that. If you even listen to them (the Big 3) they are not blaming the unions but that fact that forces beyond their control (the financial crisis, volitile fuel prices, and consumer confidence) as the real problem, not unions.

3 and 4. I don't blame unions for that. I do blame the unions for contributing to the labor cost (85% in excess of wage expense). That's a high percentage of extra-wage labor expense, and it affects the bottom line of the Big Three, whether you want to admit it or not. Now, I'm saying this next part in bold, because I want you to remember it the next time you accuse me of placing the blame squarely on the unions: I do not solely blame the unions for the troubles the Big Three are in. They are a contributing factor to the current troubles, and like any company that is having trouble with debt service, the Big Three need to examine how to rein in that cost.

If you do not blame unions, then why are you even arguing and trying to ridiculously justify why they are being paid too much? I can only conclude that you are and you are just trying to euphemistically say you are not.

 

[XpunkRocker]

So you agree. Good boy. Now sit.

well, anyone that wants an entire nation to crash and burn definantly has issues. glad to say i am not one of those people

but if you like seeing an entire nation crash and burn, then that is your perogative

 

[dnno1]

CEOs aren't the only ones working for companies that are greedy ****ers....You think there aren't ways around something like a $1 salary? I used to think you were stubborn, now I see you're a bit naive....

This is what I would do in this situation....I'd take a chunk of that money and put it into some BS research division at the auto company I work for, so it looks like, on paper, that the money is being used properly....then I wait a year or two, dissolve the "division", claiming no signifcant process has been made and pocket the money (as it wasn't spent anyway)....or I'd take a chunk, made sure I'm good friends with one of the other executives, pad his compensation package with my money, then when the executive leaves the company, have him cut me a check or transfer the money that I gave to him....I could go on, but I won't

IIRC, the $1 salary is going to last only a year.

Actually, they are only going to take $1 a year in salary while they have the loan. The truth of the matter is that they will be receiving income through the stock options and other forms of compensation which they have already received or will be receiving. The $1 a year salary is actually symbolic and for public consumption (that would be an incentive to get the company profitable anyway since it would mean more money for them). In any case it is irrelevant, whether or not they take a salary or not since this will be a loan and they are expected to pay if back within 4 to 5 years.

 

[The Senator]

Further proof GM vehicles suck: My mother bought a two-year old Malibu last November, and went in for a routine check up a couple of days ago, where the mechanics found that her car battery is nearly dead. So now she has to dish out a few hundred bucks to fix that "little" problem.

And people wonder why I don't think GM deserves billions of dollars of free money for them to continue to make crappy, uninspiring and inefficient vehicles...

 

[Addendum]

It's not the fault of "forces beyond their control". It's their failure to have a competent plan of action to deal with those "forces" you mentioned if they happen. When one doesn't plan ahead, don't be surprised when **** sticks to you when you fall

 

[dnno1]

These kinds of things hardly get paid back. It will be a good 6-10 years until they start making any payments on this debt. and if the company folds, there is no way to pay the government back. paying off 10 billion isn't something that can be done in my lifetime, and i am fairly young. these companies are losing money. if they can't make a profit, they can't pay off their debt. fannie mae and all of them will do the same thing. they will ask the government to delay, and when they start paying, it will be just the minimum payments. which is about a good 10 years away

I don't know where you are getting that from. In 1979, when Chrysler got their loan, they made their last repayment in 1983 (less than 4 years later). All of the CEO's of the Big 3 are promising to make payments as late as 2011 or 2012. I am betting that they will pay that off some time before that.

 

[BlackLantern]

Technology wasn't in 79 what it is now....and the consumer market has changed....Those companies will wait till the last possible minute to pay that off, if they even bother...and like someone else said, if they go under anyway, they aren't going to pay it off

 

[dnno1]

Further proof GM vehicles suck: My mother bought a two-year old Malibu last November, and went in for a routine check up a couple of days ago, where the mechanics found that her car battery is nearly dead. So now she has to dish out a few hundred bucks to fix that "little" problem.

And people wonder why I don't think GM deserves billions of dollars of free money for them to continue to make crappy, uninspiring and inefficient vehicles...

To be honest with you, the normal life of a car battery is about 2 years. I don't think you could guarantee that you could always get life out of on beyond that. If you did you would be quite fortunate. Furthermore I don't think GM makes batteries. Now what exactly was the problem again that she had to pay a few hundred bucks on?

 

[XpunkRocker]

and the companies weren't getting beat by competition every year....

 

[dnno1]

Technology wasn't in 79 what it is now....and the consumer market has changed....Those companies will wait till the last possible minute to pay that off, if they even bother...and like someone else said, if they go under anyway, they aren't going to pay it off

Yes, it is a lot better. That should imply that the turnaround could be quicker. More than likely those companies will pay that debt off as soon as they can so that it won't show up as a negative on their current ratio for long.

 

[dnno1]

and the companies weren't getting beat by competition every year....

Not in North America. The Big 3 have 66% of the market here according to Wards Automotive.

 

[dnno1]

It's not the fault of "forces beyond their control". It's their failure to have a competent plan of action to deal with those "forces" you mentioned if they happen. When one doesn't plan ahead, don't be surprised when **** sticks to you when you fall

I don't think the automakers have control over people defaulting on their home loans and the banks failing (although rumor has it that GMAC may have been involved in some of the sub-prime lending that was going on), which lead to the financial crisis that we are having now. Those are forces beyond their (and our) control (but maybe not the government). If people can not buy your cars, there is noting you can do as a business to sell them one short of giving it away - and we all know you can't make money doing that. It is just hind sight and foolish to say "you didn't plan ahead" when that is not the real problem. I doubt you could have done any better.

 

[XpunkRocker]

Not in North America. The Big 3 have 66% of the market here according to Wards Automotive.

world wide:
http://oica.net/wp-content/uploads/world-ranking-2007.pdf

as you can see, toyota made/sold the most cars. even more than GM. and their cars sell for more and are cheaper to make. so toyota makes way more profits than GM. not to mention Ford as well. the whole industry is in trouble, yet gm, ford, and chrysler are the only ones that need help? the other companies are doing fine.... they are hitting a down year as well.

Yes, it is a lot better. That should imply that the turnaround could be quicker. More than likely those companies will pay that debt off as soon as they can so that it won't show up as a negative on their current ratio for long.

it wouldn't imply that.... this is going to be a lot more money than what chrysler got 25 years ago. if you haven't noticed, the economy is much different than it was back in the day...

 

[Kelly]

ooops...

 

[Kelly]

I am not a sooth sayer, but I have this strange feeling that you didn't vote in all of the last 5 presidential elections.

And why do you think that? That would be 1992, 1996, 2000, 2004, and 2008.....and yes I voted in all of them....

BUT, in 2004 election, I did not vote for president (I thought they were both idiots) but I did vote.